Ethylene: Correlation
Prices it moves with, and why
Ethylene is cracked from ethane, propane or naphtha, so its cost follows oil and gas liquids. Prices are set in regional contract and spot deals and swing with polyethylene demand and the wave of new Chinese cracker capacity.
Proxy US PPI: petrochemical manufacturing index (BLS base period) · monthly, Jan 2006 to Sep 2026There is no free public price for ethylene itself, so this tab uses the closest public series as a stand-in. Read the numbers as an indication, not as the price of this exact item.
What its price moves with
Selected linkEthylene and Crude oil
Monthly changes 0.52 moderate correlation 12-month changes 0.89 strong correlation Last 5 years 0.33 monthly changes Lead or lag +1 mo Crude oil tends to lead by 1 month (r 0.72) Price function, Jan 2006 to Sep 2026 Ethylene ≈ 7.55 × (Crude oil)0.71 R² 0.82 On this fit, a 10% higher crude oil price goes with a 7.0% higher ethylene price over the long run. Units: index (BLS base period) and $/bbl.Chart: Ethylene and Crude oil prices rebased to 100 at Jan 2006, log scale
Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size.Chart: Ethylene price against Crude oil price, monthly, log scales, with fitted line
Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic.Naphtha, a refinery cut priced off crude, feeds most crackers outside North America, so oil sets the marginal cost of ethylene. The proxy index shows it: monthly moves correlate at 0.52 and yearly moves at 0.89, one of the clearest long-run ties in the group.
moderate co-movement month to month · 249 months Show chartsUS and Middle East crackers run on ethane separated from natural gas, which gives them a cost edge when gas is cheap against oil. The data tie is weaker, 0.19 monthly and 0.68 yearly, because the series is European gas while ethane trades in its own US market.
little or none co-movement month to month · 249 months Show chartsMany crackers can switch between naphtha, ethane and propane, so LPG gets cracked whenever it undercuts naphtha. That shared feedstock pool shows in the numbers: Mont Belvieu propane moves with the proxy index at 0.41 monthly and 0.82 yearly.
moderate co-movement month to month · 248 months Show chartsRefineries supply the naphtha and refinery-grade olefins that crackers use, and both businesses respond to crude and fuel demand. The refinery price index moves with the petrochemical proxy at 0.68 monthly and 0.90 yearly, among the highest readings for ethylene.
moderate co-movement month to month · 249 months Show chartsMost ethylene becomes polyethylene, so film and packaging demand pulls on monomer prices and producers usually price the two together. The resin index tracks the proxy closely, at 0.71 monthly and 0.89 yearly, and 0.85 over the last five years.
strong co-movement month to month · 249 months Show chartsHow to read these numbers
Correlation of monthly changes (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak.
12-month changes compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs.
Price function is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation.
Lead or lag checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months.
Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link.
Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site.